China: Three Cyberspace Courts now online and open for business

On 9 August and 28 September 2018, the new Cyberspace Courts in Beijing and Guangzhou were officially opened. These new specialised courts, along with their equivalent one that was formed in Hangzhou in August 2017, are meant to tackle the quickly swelling stream of internet-related court procedures in China. The establishment of these specialised courts is an encouraging step for the Chinese internet sector as well as for IP owners: it promises a more flexible procedure, less bureaucracy in obtaining evidence and higher quality judgments, handed down by specialist judges.

Jurisdiction

The establishment of the two new cyberspace courts fits in with the government’s policy of encouraging and regulating China’s burgeoning e-commerce sector, and comes in the wake of the promulgation of China’s first E-Commerce Law, which will soon enter into force.

The rules on the operation of the Cyberspace Courts are enshrined in the Supreme People’s Court’s Provisions on Several Issues Concerning the Trial of Cases by the Cyberspace Courts, issued on 7 September 2018.

As to territorial jurisdiction, the cyberspace courts have cross-regional jurisdiction over all ‘cyberspace cases’ (see categories below) that have a “genuine connection” (e.g. location of contract, location of damage etc.) with respectively Beijing, Hangzhou and Guangzhou.

As to material jurisdiction, the cyberspace courts will handle a broad variety of cases mainly including:

Online copyright disputes (including the unlawful dissemination of films, music and other copyrighted works);

Online defamation disputes;

Domain name disputes; and

Online loan contract disputes.

The Higher People’s Courts have the power to further broaden these categories for the cyberspace courts within their jurisdiction.

The cyberspace courts act as Basic People’s Courts. This means that appeals against judgments from the Cyberspace Courts can be brought before the IP Courts, for IP cases such as copyright infringements, or before the Intermediate People’s Courts, for all other cases.

“…the Cyberspace Courts will make use of blockchain technology”

Procedure

The most striking aspect about the Cyberspace Courts are the much more flexible procedural and evidential rules.

The whole procedure, from the case filing until the publication of the judgment, takes place online except in cases where off-line hearing is necessary. Online video-conference hearings are permissible. Procedural steps such as case filing and acceptance, evidence exchange, court hearings, service of judgments etc. can be conducted online through the courts’ online litigation platform.

To this end, the Cyberspace Courts will make use of blockchain technology. According to a recent announcement by the Hangzhou Cybersecurity Court, the judicial blockchain system is composed of three layers. The first layer is the core blockchain software, which allows users to keep record of electronic data, the second layer is a chain that offers reliable services like real-name authentication, electronic signatures, time stamps and data access, while the third layer will be blockchain applications run by a judicial alliance of notaries, judicial examination centers and courts.

Another innovation by the newly established Cyberspace Courts are the relaxed evidential rules. Evidence, the authenticity of which can be proven through reliable technological means, such as electronic signatures, electronic time stamps, blockchain etc. will no longer need to be notarized (and potentially also authenticated by a Chinese consulate for evidence gathered abroad), as would be the case in a normal court proceeding. This would mean a substantial reduction in time and costs spent by parties in cyberspace procedures.

Conclusion

The establishment of the specialised Cyberspace Courts is hailed by the industry as a big step forward, and the Cybersecurity Courts are expected to become popular litigation venues.

As an illustration, on its first day of operations, the Beijing Cyberspace Court already received over 200 new cases. The first case it officially accepted is a high-profile copyright infringement case, filed by a video-sharing company against a large content provider, claiming damages of over CNY 1 m (app. USD 150,000).

It is particularly hoped that the Cyberspace Courts may bring the same professionalism to internet-related litigation as the specialized IP Courts did with IP litigation in China. The new courts are also welcomed for their simplified procedures and reduction of red tape in the face of the ever-increasing caseload of internet-related cases in China.

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